Researcher: JKL Page 1 4/6/22
OLR Bill Analysis
sSB 355
AN ACT ESTABLISHING THE 340B DRUG PRICING
NONDISCRIMINATION ACT.
SUMMARY
Section 340B of the federal Public Health Service Act (i.e., the 340B
Drug Pricing Program) requires drug manufacturers participating in
Medicaid to sell certain outpatient prescription drugs (“covered drugs”)
at discounted prices to health care organizations that care for uninsured
and low-income patients. These organizations include federally
qualified health centers, children’s hospitals, hospitals that serve a
disproportionate number of low-income patients, and other safety net
providers (“340B covered entities”). 340B covered entities may dispense
the discounted drugs to any of their patients.
This bill prohibits pharmacy benefit managers (PBMs) from (1)
discriminating in certain ways against 340B covered entities or their
specified pharmacies in connection with dispensing covered drugs and
(2) preventing the 340B covered entities from keeping the benefit of the
covered drugs’ discounted prices. It applies to all PBMs (including those
that contract with the Medicare or HUSKY Health programs if they
negotiate or establish payment rates for drugs) and their subsidiaries.
The bill also specifically requires certain drug manufacturers and
wholesalers to comply with federal 340B pricing and sales requirements
when selling covered drugs to 340B covered entities in Connecticut. It
prohibits drug manufacturers from imposing a precondition, limitation,
delay, or other barrier to purchasing covered drugs beyond those
permitted by federal law.
Lastly, the bill requires the insurance commissioner to adopt
implementing regulations.
EFFECTIVE DATE: October 1, 2022 2022SB-00355-R000354-BA.DOCX
Researcher: JKL Page 2 4/6/22
§ 1 — ACTIVITIES CONSTITUTING DISCRIMINATION BY PBMS
The bill prohibits PBMs from discriminating against 340B covered
entities or their specified pharmacies in connection with dispensing
covered drugs. (“Specified pharmacies” are those that the 340B covered
entity owns or contracts with, whether the covered drugs are dispensed
in person or by mail.) For these purposes, discrimination includes the
following:
1. payment terms, reimbursement methodologies, or other terms or
conditions that (a) distinguish between covered and non-covered
drugs, (b) account for the availability of 340B program discounts
when determining reimbursement, or (c) are less favorable than
those used for similarly situated entities that are not furnishing
or dispensing covered drugs;
2. terms or conditions applicable to 340B covered entities or
specified pharmacies based on their (a) furnishing or dispensing
covered drugs or (b) status as a 340B covered entity or specified
pharmacy, including restrictions or requirements for
participating in certain pharmacy networks or audit frequency or
scope;
3. requiring 340B covered entities or their specified pharmacies to
identify covered drugs or their costs;
4. refusing to contract, or ending a contract, with a 340B covered
entity or specified pharmacy, or excluding either from a network,
because of its status as a 340B covered entity or specified
pharmacy or for any reasons other than those that apply equally
to non-340B covered entities and specified pharmacies;
5. retaliating against a 340B covered entity or specified pharmacy
because it avails itself of a right or remedy under the bill; and
6. interfering with a person’s choice to receive a covered drug from
a 340B covered entity or specified pharmacy, whether in person
or by direct delivery, mail, or other shipment method. 2022SB-00355-R000354-BA.DOCX
Researcher: JKL Page 3 4/6/22
§ 2 — PROHIBITIONS ON DRUG MANUFACTURERS AND
WHOLESALERS
The bill specifically prohibits drug manufacturers and wholesalers
subject to the 340B Drug Pricing Program’s rules from imposing
preconditions, limitations, delays, or other barriers on 340B covered
entities purchasing covered drugs, unless they are required by federal
law. The bill specifies that prohibited preconditions, limitations, delays,
or other barriers include the following:
1. implementing policies or limitations restricting 340B covered
entities’ or specified pharmacies’ ability to dispense covered
drugs, including restricting the number or type of locations that
may dispense covered drugs;
2. conditioning the sale of covered drugs for 340B covered entities
on enrollment with third-party vendors or sharing claims or
other data;
3. charging 340B covered entities for covered drugs more than the
federal ceiling price, including conditioning discounts on rebate
requests;
4. interfering with a person’s choice to receive a covered drug from
a 340B covered entity or specified pharmacy, whether in person
or by direct delivery, mail, or other shipment method;
5. delaying covered drug shipments compared to non-discounted
drugs; and
6. retaliating against a 340B covered entity or specified pharmacy
because it avails itself of a right or remedy under the bill.
COMMITTEE ACTION
Insurance and Real Estate Committee
Joint Favorable Substitute
Yea 16 Nay 1 (03/22/2022)